Transcript Healthcare Expenditure Forecast

Japan’s Healthcare System
and Its Outlook
(updated: 2014 April)
www.japanmacroadvisors.com
[email protected]
Executive Summary
A participation to public insurance system is mandatory to all residents in Japan.
The prices of medical treatment and subscribed pills are regulated under the feefor-service system. Patients directly pay 10-30% of the services they receive while
insurers pay the reminder.
The quality of the healthcare in Japan is considered to be high. Japan boost one of
the longest life expectancy and one of the lowest infant mortality. At the same
time, the system has been cost effective. Despite the recent rise, the per capita
healthcare expenditure is below OECD average.
However, its medical expenditure is growing fast in recent years. The total cost of
public healthcare has risen from 4.9% of GDP in 1984 to 9.9% of GDP in 2011. A
government study estimates that the cost will further rise by 3% to GDP by 2025,
mostly due to the demographic change.
While reforms are underway to restrain the rise, a rise of 2% to GDP seems
inevitable, in our view.
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Overview
Outlook
Reform Measures under discussion
3
Healthcare system in Japan
The healthcare system in Japan is characterized by two principles:
100% public insurance coverage
•
All residents and below must join one of the two public insurance systems regardless of
whether or not they have private health insurance.
Fee-for-Service.
•
In principle, all medical treatments and pills are covered under the public insurance system.
Patients pay portion of treatments and medicines (10-30% depending on age), and the rest
is paid directly to medical service providers by the insurers. There is a cap on patient’s
burden in all insurance systems – patients can seek reimbursement for payment above the
cap.
•
Fees are regulated. The government has a control over what is deemed as medical
treatment and their fees .
4
Japanese Public Insurance System
There are three category in the public insurance system: The elderly over the age of
75 is covered under a universal insurance. For working age and below, they need to
subscribe to either National Insurance, if they are self employed, or Employee’s
Health Insurance, if they are employed.
Age
The Latter-Stage Elderly Insurance System
(14.7 million people under coverage)
75
National Health
Insurance
(38.3 million people)
20
Employee Health Insurance*
(73.7 million people)
Note: 02e.pdf
Source: Ministry of Health, Labour and Welfare. The number of insured is as of
March 31, 2012.
5
* For simplicity, includes mutual associations for public officials and teachers.
Japanese Public Insurance System
There are two public insurance systems for the working age: National Health
Insurance and Employee’s Health Insurance.
Employee’s Health Insurance
•
Employers deduct insurance premium from salaries of their employees, match them, and
pay the whole premium to insurers.
•
Corporations and industry associations build health insurance insures.
National Health Insurance
•
Self-employed, non-salary workers, non-workers are covered by the National Insurance.
6
Separate System for the Elder
In 2008, “Medical Care System for the Latter-Stage Elderly” was established for
medical needs for those Age 75+.
•
Those age 75 and above will pay 10% of fees for medical services, while their premium is
automatically deducted from the pension money they receive from the government.
•
Additional premium paid by those between Age 65 to 74 will be set aside by insurers for the
Age 75 and above. EHI and NHI also pay some money annually to Age 75+.
•
In principle, summarizing, 50% is be funded by the national government, 10% by the elderly,
and 40% by the working age population.
A measure to levy additional insurance premium for high income earning elderly is
under consideration.
•
This change for the elderly could raise 230 billion yen for the public insurance system.
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Source: OECD Stats
812013161P1G014
Iceland ¹
Sweden
Japan
Norway
Finland
Estonia
Czech Rep.
Slovenia
Korea
Portugal
Spain
Belgium
Italy
Greece
Luxembourg ¹
France
Israel
Ireland
Netherlands
Austria
Germany
Denmark
Switzerland
Australia
OECD (34)
United Kingdom
Poland
Slovak Rep.
Hungary
Canada
New Zealand
United States
Chile
Turkey
Russian Fed.
China
Mexico
Brazil
Indonesia
South Africa
India
Infant Mortality Rate
Quality of Japan’s healthcare is Japan’s Infant mortality rate is one of the
lowest in the world, 2.3 per 1000 live births.
Infant Mortality Rate (deaths per 1000 live births)
50.0
40.0
30.0
20.0
10.0
0.0
8
Switzerland
Japan
Italy
Spain
Iceland
France
Australia
Sweden
Israel
Norway
Netherlands
New Zealand
Luxembourg
Austria
United Kingdom
Korea
Canada
Germany
Greece
Portugal
Finland
Ireland
Belgium
Slovenia
OECD (34)
Denmark
United States
Chile
Czech Rep.
Poland
Estonia
Slovak Rep.
Hungary
Turkey
Mexico
China
Brazil
Indonesia
Russian Fed.
India
South Africa
Life Expectancy at Birth
Japan’s life expectancy is one of the longest in the world. It rose to 83 years
approx. in 2011 from 72 years in 1970.
Life Expectancy (Total population at birth)
90
75
60
45
30
15
0
2011
1970
Source: OECD Stats
812013161P1G001
9
Health Expenditure
Japan’s health care system seem cost-effective. Its healthcare expenditure per
capita is USD 3,213 (purchase power parity), slightly below the OECD average of
USD 3,322.
Health Expenditure Per Capita, 2011 (or nearest year)
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
Source: OECD “Health at Glance 2013.”
Note:812013161P1G150
10
Indonesia
India
China
Turkey
S. Africa
Mexico
Brazil
Estonia
Russia
Poland
Chile
Hungary
Slovak Rep
Czech Rep
Korea
Israel
Greece
Slovenia
Portugal
Italy
Spain
New Zealand
Japan
Iceland
Finland
UK
Ireland
Australia
Sweden
Belgium
France
Luxembourg
Denmark
Germany
Canada
Austria
Netherland
Switzerland
Norway
US
-
Health Expenditure
In terms of % GDP, Japan is on a par with the OECD average.
(health and long term care combined)
Health Expenditure as % GDP, 2011 (or nearest year)
20.0%
18.0%
Long-term care
16.0%
Health
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
Source: OECD “Health at Glance 2013.”
Note: 812013161P1G185-combined exp
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Estonia
Poland
Czech Republic
Luxembourg
Korea
Hungary
Israel
Greece
United Kingdom
Slovenia
Spain
Portugal
Iceland
Finland
Japan
Norway
New Zealand
Austria
Germany
Belgium
Switzerland
Canada
Sweden
Denmark
France
Netherlands
United States
0.0%
Current Status
Outlook
Measures
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Medical Expenditure Growth
The per capita medical expenditure is increasing as the society ages. Despite the
narrower coverage after 2007, the medical expenditure for the elderly continues to
raise as a portion of the total expenditure.
Health Expenditure Per Capita and
% Age 65+ Population
25.0%
Health Expenditure Used by the Elderly (%)
350.00
Population % 65+
Per Capita
300.00
20.0%
45.0%
40.0%
2003-2007
Coverage Change:
Age 70+ ⇒ Age 75+
35.0%
250.00
15.0%
200.00
150.00
10.0%
30.0%
25.0%
20.0%
15.0%
100.00
10.0%
5.0%
50.00
2011
2008
2005
2002
1999
1996
1993
1990
1987
1984
1981
1978
1975
1972
1969
1966
1963
1960
1957
-
1954
0.0%
5.0%
0.0%
1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Note: toukei 20140408
Source: (left) Ministry of Health, Labour and Welfare. National Institute of
Population and Social Security Research. (right) Ministry of Health,
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Labour and Welfare. “Annual Health, Labour and Welfare Report 2012-2013”
Healthcare Expenditure
Currently, the government pays approximately 40% of the medical expenditure.
Their burden is expected to continue increasing as the total expenditure grows.
Medical Expenditure by Payers*
Payment by the National Government**
(JPY bn)
Others ,
0.7%
12,000
10,000
Patients,
12.3%
8,000
Governme
nt, 38.4%
Employees,
28.4%
6,000
4,000
2,000
Source: Ministry of Health, Labour and Welfare.
*Data is for FY2011.
** From [White Paper 2013]
Note: toukei 20140408
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
Employers,
20.2%
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Healthcare Expenditure Forecast
Japan’s healthcare expenditure (medical and long term care combined) has been
increasing.
Healthcare Expenditure : Historical and Forecast
(Medical and Nursing Expenditure Combined)
(JPY trn)
80.0
70.0
60.0
50.0
40.0
Forecast
30.0
20.0
10.0
2020
2025
2015
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0.0
Source: Ministry of Health, Labour and Welfare. The figure includes nursing
expenditure after 2000. Forecast is from the Comprehensive Reform of Social
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Security and Tax. Forecasts made in March 2012, included in the final report.
Note: toukei 20140408
Healthcare Expenditure Forecast
The healthcare expenditure (medical plus nursing) is expected to increase both in
nominal numbers and as a percentage of GDP. 40% of the increase (in amount) is
from nursing.
Healthcare Expenditure: Historical and Forecast
(Medical and Nursing Expenditure Combined)
(JPY trn)
2011
GDP
2012
2015
2020
2025
484.0
479.6
509.8
558.0
610.6
Medical Expenditure
Elderly Nursing Expenditure
39.0
9.0
35.1
8.4
39.5
10.5
46.9
14.9
54.0
19.8
Total as % GDP
9.9%
9.1%
9.8%
11.1%
12.1%
Source: The Comprehensive Reform of Social Security and Tax.
Forecasts made in March 2012, included in the final report.
Note: toukei 20140408
16
Healthcare Expenditure Forecast
Even if only the cost-cutting measures are taken, the total expenditure is expected
to increase by 1.5% of GDP.
Healthcare Expenditure: Historical and Forecast
(Medical and Nursing Expenditure Combined)
(JPY trn)
Health Expenditure
Elderly Nursing Expenditure
Impact as
2015
Reformed % of GDP
As Is
1.0
Impact of Reform
<+>
Improving in-hospital care
Transferring in-hospital patients to out-hospital
Improving nursing care
<->
Shortening in-hospital stay
Decreasing hospital visits
Increasing home-care
Prevention
54.0
19.8
53.3
16.4
39.5
10.5
39.1
9.9
Impact as
2025
Reformed % of GDP
As Is
4.10
0.2%
2.1%
0.5%
6.5
1.1
5.3
1.5
0.3
0.9
-1.4%
-0.3%
-
1.1
0.3
0.2
0.1
0.7%
-
5.9
1.5
0.8
0.6
Source: The Comprehensive Reform of Social Security and Tax.
Forecasts made in March 2012, included in the final report.
Note: toukei 20140408
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Medical Expenditure Growth
The speed of Japan’s health expenditure increase outpaces other countries.
Annual Average Growth Rate of Per Capita Health Expenditure 2000-2011
Source: OECD “Health at Glance 2013.”
Note: 8120131P1G151
Korea
Chile ¹
Japan
Israel
Slovak Rep
Hungary
Germany
Sweden
Finland
Switzerland
US
Poland
Netherlands
New Zealand
Canada
France
Mexico
Belgium
Norway
Austria
Australia
Italy
Spain
Cxech Rep
Slovenia
Denmark
UK
Portugal
Estonia
Iceland
Ireland
Greece
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
-10.0%
-12.0%
-14.0%
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Current Status
Outlook
Measures
19
Deterrence of Unnecessary Access
On average, a Japanese visits doctors 13 times per year. Introduction of general
practitioners (GPs) as gatekeeper may be able to reduce the burden of doctors, and
hence decrease the total number of visits.
Number of Annual Doctor Consultation Per Capita 2011
14.0
12.0
10.0
8.0
6.0
4.0
2.0
Source: OECD “Health at Glance 2013.”
Note: 812013161P1G1065-doctor
consultation
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South Africa
Brazil
Mexico
Sweden
Chile
New Zealand
Ireland
Switzerland
United States
Portugal
Finland
Denmark
United Kingdom
Norway
Iceland
Israel
Estonia
Slovenia
Netherlands
Luxembourg
Australia
Poland
France
Austria
Spain
Canada
Belgium
Turkey
Russian Fed.
Germany
Slovak Republic
Czech Republic
Hungary
Japan
Korea
0.0
Deterrence of Unnecessary Access
Approximately 70% is spent on services at hospitals and clinic.
Health Expenditure by Usage
Hospital
Nurse
Living Cost, Visits, 0.2%
2.1%
Aftercare,
1.5%
Medicine,
17.2%
In Patient ,
37.3%
Dental,
6.9%
Out Parient
, 34.8%
Source: Ministry of Health, Labour and Welfare. Data is for FY2011.
Note: toukei 20140408
21
Deterrence of Unnecessary Access
Japanese in-patients tend to stay in hospitals for a longer period of time than those
in other OECD countries. If then can stay at home under care of local community
and practitioners, the expenditure may decrease.
Average Length of Stay in Hospital 2011
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
Source: OECD “Health at Glance 2013.”
Note: 812013161P1G077-length of stay in
hosp
22
Turkey
Mexico
Indonesia
Denmark
Sweden
South Africa
Netherlands¹
Australia
Israel
Chile
United States
Iceland
Ireland
Greece
Norway
United Kingdom
Slovenia
Poland
Spain
Estonia
Canada¹
Austria
Slovak Republic
Italy
Belgium
New Zealand
Luxembourg
Portugal
France
Switzerland
Germany
Czech Republic
Hungary
China
Finland
Russian Fed.
Korea
Japan¹
0.0
Separate System for the Elder
In 2008, “Medical Care System for the Latter-Stage Elderly” was established for
medical needs for those Age 75+.
•
Those age 75 and above will pay 10% of fees for medical services, while their premium is
automatically deducted from the pension money they receive from the government.
•
Additional premium paid by those between Age 65 to 74 will be set aside by insurers for the
Age 75 and above. EHI and NHI also pay some money annually to Age 75+.
•
In principle, summarizing, 50% is be funded by the national government, 10% by the elderly,
and 40% by the working age population.
A measure to levy additional insurance premium for high income earning elderly is
under consideration.
•
This change for the elderly could raise 230 billion yen for the public insurance system.
23
Generics and Prevention
More use of generics will help Japan contain medical costs. Generics use in Japan
is about half of the OECD average in value and volume. Prevention is also likely to
help minimize the number of patients with adult diseases that require frequent
and continuous services.
Share of Generics in Total Pharmaceutical Market 2011
45.0
40.0
35.0
30.0
25.0
OECD19 Average
20.0
Japan
15.0
10.0
5.0
0.0
By Value
By Volume
Source: OECD “Health at Glance 2013.”
Note: 812013161P1G094-generics
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Mixed Treatment
Patients may become allowed to be treated under the insurance and out of their
own pocket simultaneously. This will increase the welfare of patients by choice,
while this may potentially save the government some money.
•
The original plan was to allow mixed treatment so that patients of difficult disease will have
more options. However, recently, the ministry is showing unwillingness to allow it.
•
As a compromise, it is likely that a new rule will be set up regarding the mixed treatment.
• Written proposal describing different treatment options for patients must be
submitted by doctors to patients.
• Medical moral hazard (i.e. doctors suggesting unnecessary treatments) must be
avoided.
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IMPORTANT DISCLAIMER
IMPORTANT DISCLAIMER: The information herein is not intended to be an offer to buy or sell, or a solicitation of
an offer to buy or sell, any securities and including any expression of opinion, has been obtained from or is based
upon sources believed to be reliable but is not guaranteed as to accuracy or completeness although Japan Macro
Advisors (“JMA”) believe it to be clear, fair and not misleading. Each author of this report is not permitted to trade
in or hold any of the investments or related investments which are the subject of this document. The views of JMA
reflected in this document may change without notice. To the maximum extent possible at law, JMA does not
accept any liability whatsoever arising from the use of the material or information contained herein. This research
document is not intended for use by or targeted at retail customers. Should a retail customer obtain a copy of this
report they should not base their investment decisions solely on the basis of this document but must seek
independent financial advice.
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